Drug Companies Pushed From Far and Wide to Explain High Prices

As complaints grow about exorbitant drug prices, pharmaceutical companies are coming under pressure to disclose the development costs and profits of those medicines and the rationale for charging what they do.

“The industry has used R&D costs for the justification, but anyone who is reasonably sophisticated understands those are sunk costs and have little to do with pricing,” John Rother, chief executive of the National Coalition on Health Care, a group of insurers, consumer organizations, labor unions and employers concerned about drug prices said.

“The more important information is any calculation of value. If the drug actually cures people, then what costs in health care are you saving?”